All you Need to Know about Bad Credit Car Loans in Caledonia

All you Need to Know about Bad Credit Car Loans in Caledonia

Posted on February 14, 2022

The subprime car loan market in Canada is quite large and growing rapidly. If you have subprime credit or are just curious about how these loans work, you are in the right spot. We're going to give you an overview of bad credit car loans in Caledonia and how you can take advantage of all they have to offer.

Roughly three million-plus Canadians fall under the category of “subprime,” and just about everyone who lives in Canada needs a car.

So, there are millions of subprime car loans that are up for grabs.

The competition for these bad credit car loans in Caledonia loans is quite fierce because, contrary to popular belief, these loans do not usually go into default.

As an investor, would you prefer offering a loan to a prime borrower with a rate of around 5% or a subprime borrower with a rate anywhere from 10% to 20+%? As you can see, there is a substantial opportunity available for these car loan providers.

How to qualify for a subprime car loan in Caledonia

Your credit score needs to be lower than 660 to fall into the alt-A or subprime category.

You can view your credit score online for free, so you have no reason not to keep tabs on it. While having great credit is ideal, if you had some credit challenges in the past, you can still get approved for a car loan.

One of the most important things that any prospective lender will look at is your income. If your income is stable and sufficient, the lender will extend a car loan to you, albeit at a higher interest rate.

New or used?

If you are applying for a subprime car loan, you will most likely be purchasing a used car. Most new cars cost over forty thousand dollars; when you factor in the higher interest rate, most people would not be able to afford the monthly payments.

Buying a used car can be a great decision; you do not lose money due to depreciation like you would with a brand new car.

Since your loan is a smaller amount, you will be able to pay it off faster. While on the topic of paying your loan off faster, you can start working on rebuilding your credit.

Once your credit reaches a prime level (anything over 680), you can either refinance your current loan or buy a brand new car.

How to find a great car and car loan in Caledonia

This is the most important step; while there are many lenders who do provide subprime car loans, you want someone who can negotiate on your behalf. The best way to do that is by enlisting help from a local car dealership.

These dealerships have a few things going for them that give them an edge. The dealership can shop around with all of the lenders throughout Canada and find you the best terms. If you tried to do that on your own, it would take forever.

The same dealership will have vehicles in their inventory that will meet your needs and budgets. If you are serious about buying a car and getting a great car loan, then you must follow these tips and contact the dealership today.

We’d love to help you find the perfect car loan. Simply fill in the form below and we’ll get back to you ASAP! 

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